MLMAttorney’s most requested video of the month: What Is the U.S. and International Trend in Recognizing the Validity of Personal Use by Distributors in
Pyramid Cases?

In short, is it legal to motivate distributors to buy products in order for them to qualify for the compensation plan rewards as opposed to purchasing product/services for their own personal use or for resale? This question greatly impacts direct selling companies and their owners/executives. Read the recent Burnlounge decision on our website.

In the last 10 years, distributor personal use, as a legitimate end-destination for product/service has been increasingly recognized by courts, legislatures and regulators. In 2013 and 2014, two European Union tribunals; now counting more than a dozen U.S. states have amended MLM statutes. In 2004, an FTC advisory opinion applauded efficiencies of

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Renovation of MLMLegal.com- Come Visit the New and Improved Website

MLMLegal.com is Upgraded: Easy-to-Use Navigation Bars, Stylized Images, Organized Landing Pages for Articles, Videos, & MLM Legal

Come visit the new and improved MLMLegal.com! This is the first major renovation of MLMLegal.com. MLMLegal.com’s new face is easy to navigate and full of valuable and educational content, pertinent to direct sellers. And Babener & Associates is working on updating more pages throughout 2016.

A new and easy-to-use navigation bar helps visitors easily find what they are looking for, whether it is the blog, articles, videos, MLM resources, conference pages, or one of the many other resources available on the website for network marketers.

The main homepage image was provided by expert MLM Attorney himself, Jeff Babener, while on a trip to Europe. These beautiful mountains provide the metaphor “Let Us Be Your Guide.” Let the Law Office of Babener and Associates, MLMLegal.com, guide clients through the sometimes difficult MLM industry and its legal climate. As experienced network marketing attorneys, who have been in the industry for over three decades, and who represent companies such as Melaleuca, Avon, Herbalife, NuSkin, USANA, Nerium, Excel, and Team National, our firm has the experience and credibility to help direct selling companies navigate the direct selling industry.

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Absolutely! Incentives increase sales. However, sales incentives go by many names and shapes and sizes. Obviously, the understood and expected incentives are bonuses and commissions. Since companies are trying to incentivize different types of behavior, the compensation plans of companies are often complex and multi-task to provide incentives for retail selling, preferred recurring customers, building wide, building deep, working with immediate downline and deep into a downline, time sensitive personal and group sales production, personal and group sales, longevity,

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One common question that we hear is in regards to event sales; such as fairs, kiosks, vending machines, and other alternative means of sales, am I authorized to sell my company’s products at such places and events?

Most companies would prohibit sales in flea markets, swap meets, vending machines, or garage sales. It is generally viewed that such locations dilute the value of the company’s products and opportunities. Companies typically prohibit sales in retail stores, but the purpose for this rule is to avoid the appearance of the company being in competition with the direct selling channel of its distributors, a model that is really based on person-to-person marketing.

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MLM Startup Conference

The next MLM Startup Conference takes place October 22 and 23, 2015 in Las Vegas.

With the costs of the compensation plan, attorney’s fees, software, hiring staff, recruiting consultants, creating/designing products, the list goes on… starting a direct selling company can be expensive and difficult! We understand how complex it is to tackle a MLM startup. That’s why we offer the Starting and Running the Successful MLM Company Conference.

We offer MLM entrepreneurs a way to network with experts from all sectors of the direct selling industry: legal, recruiting, technology/software, compensation plans, funding, generate leads, website and back office, business model, and more – all in one place, for one affordable price ($195 for the first attendee, each additional is $150).

So, if you’re starting a MLM, network marketing, direct selling company, or just thinking about starting a MLM company, come join us at the MLM Startup Event/Seminar in Las Vegas! The Hosts are Business Consultant and MLM Legal Expert, Jeff Babener, and MLM Compensation Plan Consultant, Mike Sheffield.

Our next conference takes place October 22 & 23, 2015 in Las Vegas (who doesn’t want a good reason to go to Las Vegas?). We even offer the Innovation Campaign for those who are on an even tighter budget.

Visit our website, www.mlmlegal.com, or our conference page to learn more and to see the full line-up of speakers. Read testimonials and watch our invitation videos. Anyone who is starting or running a MLM, network marketing, direct selling, party plan company is welcome to attend.

Call us at 800-231-2162 to register.

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Every business should be concerned about market saturation. The direct selling industry is no different.

The direct selling industry thrives on marketplace competition in order to continue to deliver high-quality goods and services, especially as the population grows and consumer demands change.

In one significant legal case, regulators argued that a direct selling company was bound for failure by the prospect of saturation in the marketplace, both for product, as well as for distributor recruitment. In that landmark case, the court took notice of the concept of “saturation,” but it rejected the concept as an obstacle to success of the particular direct selling company involved. The court took note of a large market for particular products and explained that the direct selling company was merely taking its place in the competitive marketplace.

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Front loading generally refers to a process in which a MLM company, or a sponsoring distributor, encourages a new distributor to purchase far more product than is commercially reasonable under the circumstances. Often the “push” is explained to the recruit as necessary to qualify in the plan. This is an unacceptable practice is often one indicia of a pyramid scheme.

On the other hand, virtually all regulatory agencies recognize that a purchase of an “at cost” sales kit is an acceptable practice in the mainstream of leading direct selling companies. Such mandated kits are typically in the $50-$100 range. They generally entail “hard copy” or online supply of sales and marketing materials as well as ongoing sales and marketing materials updates for a year. Typically the mandated sales kit does not include product and generally a company offers an optional deluxe kit that may include product. Such an optional kit, which is often referred to as a “fast start” kit, may contain several hundred dollars of product. This is not unusual. Although the same regulatory standards on

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Sign up for the MLM News Global newsletter for top headlines, news stories, scam alerts, videos, articles, and more information on the network marketing industry, by www.mlmattorney.com.

Sign up for the MLM News Global newsletter for top headlines, news stories, scam alerts, videos, articles, and more information on the network marketing industry.

There are a lot of outspoken bloggers and critics online, as well as negative opinions floating around the social networks, but the positives drown out the negatives. It’s not hard to find a loud voice criticizing the direct selling industry through a quick Google search. And it is true… there are many pyramid/Ponzi schemes, primarily internationally based, that parade themselves as MLM/direct delling… and they are not. They are merely pyramid headhunting recruitment schemes that often use bogus products and services as an excuse to move money. The entire emphasis of such organizations is to cause investors to pay money and cause others to do the same, with a thin veneer of an actual product or service. In fact, the revenue to pay commissions instead comes from distributor payments and not sales to the ultimate user.

Despite this, the facts remains MLM and direct selling are a major part of the fabric of commerce. Statistics on 2014 sales, compiled by the World Federation of Direct Selling Associations, indicate global sales of $183 billion and 100 million distributors. In the U.S., there are 18 million distributors posting $35 billion in sales. Numerous direct selling companies are traded on the NYSE.

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The Direct Selling Association (DSA) Names the 2015 ETHOS Award Winners (DSA Image Trademark of the DSA), by www.mlmattorney.com.

The Direct Selling Association (DSA) Names the 2015 ETHOS Award Winners (DSA Image Trademark of the DSA)

During an annual meeting in San Antonio, Texas, the DSA named the 2015 ETHOS Award Winners for 2015, honoring the DSA-member companies with excellence in marketing and sales campaigns, product innovation, salesforce development, technology innovation, vision for tomorrow, and rising star and partnership categories.

The overall winners include, Mary Kay, Inc., LifeWave, Inc., Scentsy, Inc., Rodan + Fields, Nu Skin Enterprises, All’asta, and Step Into Success.

Read the sub-category winners and the press release from the DSA.

Learn more about the network marketing business at www.mlmlegal.com and www.mlmattorney.com.

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Your cost of goods is calculated as your acquisition or manufacturing cost. The more frequent question we come across relates to pricing. Most MLM experts agree that you must have adequate margins to pay commissions and to make a profit. Different products and services carry different profit margins. In addition, smaller margins may be satisfactory with high-priced products because there is still room for profit. Most MLM companies are likely to pay total commissions equal to between 30 and 45 percent of the price sold to distributors for resale, or prices for which consumers buy directly from the company. A typical company will try to achieve a minimum 5-7 times markup to allow for commissions, overhead and profit. Typical markup for resale by distributors is 25% of their purchase price. A good place to visit this issue is at the MLM Startup Conference, offered by www.mlmlegal.com, where experts discuss margins, pricing, profit, proformas, and a whole lot more.

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